Why Canada Could Be Burning Coal Well Beyond the 2030 Deadline Set By the Liberals

 

 

By Brian Hill

September 3, 2021 - Despite what Canadians have been told, some parts of the country could be burning coal well beyond the 2030 deadline set by the Liberals in 2016.

Liberal Leader Justin Trudeau and a number of high-profile Liberal candidates running in the 2021 federal election have reiterated the promise that Canada will “phase out” or “power past” coal by the end of this decade.

On Aug. 29, the Liberals took this pledge one step further, promising to end exports of thermal coal — the kind used to generate electricity — by 2030. This promise, the Liberals said, will align Canada’s international trading practices with its domestic climate change policies.

Canada exports about 30 million tons of coal each year from ports in British Columbia, including several million tons of thermal coal, which is either mined domestically or in the United States and then sent across the border on trains because coastal communities in California, Oregon and Washington state have deemed it too dangerous to ship.

On the surface, the Liberal promises make it seem like Canada will be done with coal in the very near future.

But both promises — the pledge to stop burning thermal coal by 2030 and the promise to stop exporting it — may be difficult to achieve based on current government commitments and the plans of some provinces.

At the same time the Liberal government was working on its plan to phase out coal by 2030, it was quietly negotiating an “agreement in principle” that allows Nova Scotia to keep its coal-fired electricity plants open until 2040.

This deal was announced in November 2016 at a joint press conference held by former Liberal environment minister Catherine McKenna and former Nova Scotia premier Stephen McNeil.

Then, in July of this year, New Brunswick, which also burns coal for electricity, asked the federal government if it could keep one of its coal-fired plants open until 2040 because it would be too expensive to replace in time to meet the federal deadline.

When New Brunswick made this request, Liberal Environment Minister Jonathan Wilkinson, who’s seeking re-election in B.C., said “I certainly understand” the province’s position and suggested the federal government was considering it.

“I’m not in a position yet to make a determination one way or another,” Wilkinson told the CBC in July. “It’s certainly something that’s under discussion.”

Right now, Alberta, Saskatchewan, New Brunswick and Nova Scotia use coal to make electricity. Alberta is on track to phase out coal by 2023, largely because of natural gas, and it’s unclear what the other provinces will do.

Plants to operate ‘beyond 2030’

In an interview with Global News on Sept. 1, Wilkinson said the Liberal Party’s position is that no one should be burning coal in Canada past 2030 — although he wouldn’t definitively say whether the Liberals, if re-elected, will reject New Brunswick’s proposal to burn coal beyond that date.

“Our position hasn’t changed. We have committed to phasing out the use of thermal coal domestically by 2030,” Wilkinson said.

“The focus for us is on working collaboratively with provinces and territories on solutions that will ensure the electricity generating system will be robust — it will be affordable.”

Wilkinson also insisted that there are no “equivalency agreements” in place that enable Nova Scotia or any other province in Canada to burn thermal coal past the 2030 federal deadline. An equivalency agreement allows provinces to emit more carbon dioxide — usually by burning coal — in the future in exchange for reducing carbon emissions from other sources now.

But Wilkinson’s position, which is based on the fact that equivalency agreements like the one signed with Nova Scotia expire every five years and must be renegotiated, directly contradicts remarks made by Nova Scotia’s government when it signed the agreement in principle with the federal government in 2016.

“Nova Scotia and Canada will also establish a new equivalency agreement that will enable the province to move directly from fossil fuels to clean energy sources but enable Nova Scotia’s coal-fired plants to operate at some capacity beyond 2030,” a statement from McNeil’s office published in July 2016 said.

Wilkinson’s remarks also appear to contradict statements published by the government in the Canada Gazette in 2018, which said the equivalency agreement with Nova Scotia was based on the assumption that seven of the province’s coal-fired electricity plants would continue operating “beyond 2030.”

And the equivalency agreement itself contains a provision that says the federal and provincial governments are “committed to negotiating” a new or amended deal for the period 2015-2040.

“I have much respect for Minister Wilkinson, but in this regard, he is being disingenuous regarding the spirit and intent of these agreements,” said David Khan, a lawyer with Ecojustice Canada and the former leader of the Alberta Liberal Party.

Wilkinson is “splitting hairs” and “using technicalities” to justify his position that there are no deals in place that enable Nova Scotia to burn coal beyond 2030, Khan said.

As for the Liberals’ pledge to stop exporting thermal coal, that promise is a work in progress, Wilkinson said, that will require discussions with coal producers and exporters if the Liberals are re-elected.

That could mean different rules for thermal coal mined in Canada versus coal mined in the United States, Wilkinson said, but the proposed ban will eventually apply to everyone.

“It will ensure that there are no thermal coal exports by no later than 2030,” Wilkinson said.

Global News asked the Conservative Party and the NDP to explain their positions on thermal and metallurgical coal. Global News also asked both parties if they’d ban thermal coal experts and whether they’d uphold recent policy decisions aimed at stopping future thermal coal development in Canada.

Neither party responded to these questions by publication.

The Green Party, meanwhile, said it supports a complete ban on the production and export of thermal coal. Paul Manly, the party’s candidate in the B.C. riding of Nanaimo-Ladysmith, said Canada should also end coal-fired electricity now — not 10 or 20 years in the future.

Push to ‘phase out’ coal

The big push to phase out coal in Canada started in the mid-2000s, when the Liberal government in Ontario decided to replace coal-fired electricity with renewable energy, such as wind and solar.

While Ontario’s efforts to eliminate coal were a huge success — the province went from making a quarter of its electricity with coal in 2006 to none by 2015 — they were enormously expensive.

By some estimates, the coal phase-out in Ontario and other costs associated with upgrading the province’s electricity grid will cost taxpayers and electricity ratepayers in Ontario more than $200 billion by 2045 if all debt and hydro-related subsidies are considered.

Both former premier Kathleen Wynne and former environment minister Glenn Thibeault acknowledged the way Ontario went about procuring green energy — by offering long-term contracts to wind and solar producers that guaranteed above-market rates — was a “mistake.”

Other provinces, meanwhile, haven’t had to deal with the same green energy transition. B.C., Manitoba, Quebec and Newfoundland and Labrador have vast supplies of hydro electricity — more than they can use, in fact.

But that doesn’t mean these provinces haven’t experienced cost overruns or opposition to renewable energy projects.

Indigenous communities and environmental groups in each of these provinces have opposed certain hydroelectric projects due to the widespread devastation they have on wildlife and local ecosystems.

The Muskrat Falls hydro dam in Labrador was recently completed years behind schedule and billions of dollars over budget. And just weeks before the 2021 federal election got underway, Trudeau promised $5.2 billion in taxpayer-funded bailout funds for the way-over-budget project and the financially struggling province that built it.

When Alberta decided it was time to stop using coal, the government created a competition where companies bid for contracts, rather than the government offering whatever rates it thought were fair.

Alberta’s Renewable Electricity Plan, created by the government of former NDP premier Rachel Notley, resulted in more than a dozen companies getting contracts for wind power at rates that were roughly a third of what Ontario paid in 2010.

Despite these results, Alberta’s United Conservative government scrapped the program in 2019, saying it offered unnecessary and wasteful “subsidies” to renewable energy companies.

But critics of this decision said it was made because Alberta’s government favours natural gas over wind and solar.

“Alberta will be fully transitioned from coal-powered electricity by the end of 2023, six years ahead of the federal target,” said Margeaux Maron, a spokesperson for Alberta’s associate minister of natural gas and electricity.

“Alberta is committed to its fair, efficient and openly competitive electricity market that is driven by private investment. Renewables can clearly compete in the market on their own, without government subsidy.”

A tale of two coals

The most recent statistics from Natural Resources Canada show Canadian mines produced 57 million tons of coal in 2019. This is slightly less than what was produced in 2018 and continues the downward trend that began in 2016.

About 27 million tons of the coal produced in 2019 was thermal coal, most of which was used to generate electricity in Alberta, Saskatchewan, New Brunswick and Nova Scotia. The remaining 30 million tons was “coking” or “metallurgical” coal, which is used in steel making because of the extreme heat it generates when burned.

In July, the Liberal government released a policy statement that said all new thermal coal projects, including plans to expand any existing mines, would likely cause “unacceptable environmental effects” and are therefore not aligned with Canada’s climate change objectives.

Even though companies can still apply to start new thermal coal projects, Wilkinson said, this policy, if kept in place, essentially means the end of any future thermal coal development in Canada.

But no such declaration was made about metallurgical coal. Instead, the government said new metallurgical coal mines — there are four projects currently being considered in B.C. — will have to submit to a federal environmental impact assessment.

Khan, the lawyer with Ecojustice Canada, believes this doesn’t go far enough. He thinks the government should set a firm deadline for phasing out all forms of coal because of its effect on the global climate and because of the clear links between carbon emissions and extreme weather events, such as wildfires, flooding and drought.

“We think that an ambitious target for phasing out metallurgical coal could be 2035,” he said.

Although steel is an old technology, it’s essential to global efforts to tackle climate change. That’s because it’s used to manufacture wind turbines, electric vehicles, solar panels, and many other green inventions.

But steel is also responsible for roughly eight per cent of global carbon emissions, according to a recent report from the World Steel Association. The report, published in May, discusses new technologies that use far less metallurgical coal to make steel. This includes hydrogen and electric-arc furnaces — both of which are being developed internationally and in Canada.

In July, about a month before the federal election was called, the Liberals announced up to $420 million in funding for Algoma Steel to convert its Ontario production facility to electric-arc technology. Trudeau, who made the announcement in Sault Ste. Marie, said the shift away from coal will cut greenhouse gas emissions by up to three million tons a year by 2030, roughly the same as removing 900,000 gas-burning cars from the road.

The Liberal election platform also talks about an $8-billion government fund — $5 billion of which was promised in the most recent budget — to “decarbonize” heavy industries, such as steel and aluminum manufacturing.

The party’s platform also mentions the Atlantic Loop, a project that, if completed, would connect Quebec’s hydro power to the electricity grids of Canada’s easternmost provinces. But the platform doesn’t provide any specific details of how or when this project would be completed, nor does it say how much money it would cost.

Backlash against coal

B.C. and Alberta are by far the two largest producers of coal in Canada. Combined, the provinces account for 83 per cent coal production.

The Vista mine, located on the eastern slopes of the Rockies in Hinton, Alta., is Canada’s largest thermal coal mine. This site can produce roughly six million tons of thermal coal a year.

In May, the Impact Assessment Agency of Canada announced that Vista had submitted an application to expand the mine and called for public input. If approved, this expansion could double Vista’s annual output.

But in July, Vista was told the government’s new policy aimed at curbing thermal coal production would also apply to the Vista project. This was despite the fact that Vista submitted its proposal to the government before the revised policy was announced.

“Eliminating coal-fired power and replacing it with cleaner sources is an essential part of the transition to a low carbon economy,” Wilkinson said in July.

But a June 2020 order issued by Wilkinson that said the Vista expansion must undergo a federal environmental assessment was quashed by a Federal Court judge on July 19.

The judge said Wilkinson and the government failed to consult with the Ermineskin Cree Nation, which has an agreement with the owners of the Vista mine.

“Not only was there no consultation at all, but I find Ermineskin was inexplicably frozen out of this very one-sided process,” Judge Henry Brown wrote in his decision.

Regardless of whether the Vista project is subject to a federal environmental assessment, many Albertans are opposed to coal mining in the Rockies.

Alberta Premier Jason Kenny was forced to backtrack on a decision about metallurgical coal mines along the eastern slopes of the Rockies after intense public outcry. Environmentalists and others denounced the decision to lift the province’s 1976 coal policy as an affront to nature and as a threat to wildlife.

“With respect to the Rockies and the foothills, we’re talking about a landscape that is iconic not just for Albertans, but I think it’s an important part of the Canadian identity as well,” said Ian Urquhart, a political scientist and the executive director of the Alberta Wilderness Association.

“We’re talking about introducing coal mines into a landscape that’s already prone to drought and water shortages. You’re robbing ecosystems of the lifeblood they need in order to live.”

The future of coal

New Brunswick’s request to continue burning coal until 2040 means the future of thermal coal in Canada remains uncertain.

“We’re pursuing an equivalency agreement with the federal government that would allow the Belledune Generating Station (which burns coal) to continue to operate at a reduced capacity to the end of its scheduled operating life in 2040,” said Mike Holland, the province’s minister of natural resources and energy.

“We believe the equivalency agreement will give us the necessary time to develop non-emitting electricity generating options.”

Saskatchewan, meanwhile, has its own equivalency deal with the federal government. The province also completed a $1.5-billion carbon capture and storage project at its Boundary Dam 3 coal-fired electricity plant, which the government says will allow it to operate beyond 2030. If a similar system isn’t built at Saskatchewan’s remaining coal-fired plants, the government will have no choice but to shut them down by 2030 in order to comply with federal regulations.

Nova Scotia said it’s committed to making sure 80 per cent of its electricity comes from renewable sources by 2030. At present, about half of the province’s electricity is generated by coal.

Peter Gregg, the president of Nova Scotia Power, the province’s only electricity utility, said the company has permission to burn coal until 2040. But, he said, it plans to phase it out sooner.

“Our customers know and are telling us that coal is not part of our future. It can’t be,” Gregg said. “Our plan is to do that — to accelerate getting off coal — but to do that in a way that is also affordable for our customers.”

This means drastically increasing the supply of wind, hydro and solar power, Gregg said, plus building links with other provinces to connect their clean electricity with homes and businesses in Nova Scotia.

“(This) would be the most affordable option,” Gregg said.